The Australian paper and machinery merchant has entered into a scheme of arrangement with PagePack, which is majority owned by Maui Capital.
The 45c per share offer is for 100% of CPI’s shares and values the company at $62.3m on an enterprise value basis. The offer was a 32.4% premium over CPI’s closing price on 14 January, and a 61.1% premium over CPI’s “six-month volume-weighted average price” of 28c.
The last time CPI’s share price hit 45c was in January 2008.
The deal creates the “biggest player in the Australasian market”, according to CPI managing director Bernard Cassell.
According to a statement to the ASX: “PagePack is now seeking to acquire 100% of CPI as part of the PagePack Group’s ongoing commitment and participation in the growth of their business in this industry.”
The buyout will see CPI delisted from the ASX.
The deal remains subject to shareholder approval and ACCC clearance, and is expected to complete in May 2011.
Cassell told ProPrint that the deal provides good value for the shareholders, adding “it is such a competitive market that it is inconceivable that the ACCC would have a problem”.
He said that while he was confident of the direction CPI had been taking, “our first thought is to the shareholders”.
“We are confident of the direction we are taking the business. We have made very public the whole plan in relation to facilities that will cut the operational costs out of the business going forward.”
He said shareholders had been given the choice of whether to “hang on and wait and we will deliver on this promise in 12 months to two years”, or take this offer.
“When an offer like his comes along, we are publicly listed company directors, so our first thought must be to the shareholders,” he added.
He said it would be business as usual for customers and did not expect any major internal changes. “Absolutely no changes have been foreshadowed and I see no reason they would want to make any.”
Cassell also said he saw scope for further consolidation across the paper industry.
“I would imagine when you look at the sales of the industry, there is further consolidation to come. It is an industry that is very heavily over-serviced. We provide a level of service that is often denigrated by our customers but can’t be matched by their other suppliers,” he said.
Maui Capital bought Focus Paper in November last year.
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